ENGLISH VERSION Panamenians did not felt the benefits of oil prices reductions

"Panama is the only country in the world where the consumer has not feel an impact of lower oil prices like a result of the wrong policy of the government relief," according to economist John Jované.

Jované said that because in the first half of 2015, oil prices fell to 61%, so a lower cost of electricity was expected, but the authorities indicated that the benefit would be in the second half.

But now the government has announced the permanence of the subsidy for 80% of the population and not the expected low cost of energy.

"If oil prices continue falling, this could influence the decline in the second half of 2015 or in the first half of 2016," said Ivan Barria, manager of the Electricity Transmission Company (ETESA), at the moment oil prices fell.

However, Roberto Meana, administrator of the Public Services Authority, accompanied by Victor Urrutia, Secretary of Energy, announced on Monday 8th of this month that users of the system consuming up to 400 kW/h (80% customers) will have a new rise.

Until now, authorities have not announced the low rate, that according to them, would due to the decrease in the cost of oil.

Meanwhile, Jakarta Rios, president of Ethical Consumption, said the government is proceeding "lazy" way with the population, because despite that one of the inputs for the production of electricity in Panama is the fuel and global trends are to down, they decided to keep the same price.

To Jované, the Government, in fact, what he did was benefit increased earnings power generators down because this situation will cost the same, but the government has not been able to do this reduction to users.

"What made the government was saved in part the subsidy and allow corporate profits, playing against the consumers" said Jované, who agreed with the consumer representative.

Pedro Acosta, consumer representative, agrees with this analysis, as argues that Panama signed an agreement with transnational power in which he assured them they will not lose anything.

Expected benefits

Meanwhile, the good news was for commerce and industry, which does receive a reduction of between 11% and 26% of the cost of the service next semester.

The authorities have explained that the subsidy for customers who consume more than 400 kW / h, representing 20% of users of the system is eliminated.

These consumers do benefit from lower oil prices still persists (61 dollars per barrel), it will pay the actual cost of energy.

Expectation exists as to whether this lower rate or no benefit consumers with an adjustment in the final price of products.

However, the president of the Chamber of Commerce, Industry and Agriculture of Panama, Carlos Fernandez, said through a statement that "every trade and industry will evaluate their situation to determine if it would have any impact on consumer prices."

"We must remember that in most cases, the electricity tariff does not affect more than 5% or 7% of the final cost of the product, in many cases it is even less than 5%," said the businessman.

The statements of the business leader glimpse that even when traders experience a decline in the cost of electricity rates, this reduction could not pass the final cost of products and services.

This is consistent with estimates of Acosta, the National Union of Consumers and Users of Panama. "I doubt that the commercial sector will lower prices, however, could keep the same costs and earn more," said consumer representative. 

The economist Felipe Argote both cautious is also shown as he explained that "we live in a free market supply and demand, so that businesses and industries have the right to incorporate these savings to their profits."

"It should have an effect on the cost of products and services, but does not assure that each employer decides on prices which can put their products," he said.

Doubts of lower prices

Meanwhile, Rivers said that the low rate is a promise traders over government and promised a reduction in electricity rates for the second half of the year.

Doubts reduction of between 11% and 26% of the actual cost of the rate for commercial and industrial experience not only consumers, there is a degree of uncertainty among industrial Ricardo Sotelo, president of the Union of Industrialists of Panama (SIP), he said actually expected more low in the rate to be maintained.

"We should see how classifies the Secretary of Energy to industrial about the fee, as they could locate in the medium voltage demand (MTD) and do not know whether the reduction of between 11% and 26% of the cost apply for this segment, so we should wait to see the new rate", he said.

"We believe the government has the opportunity to do some pro-rate adjustment", he added.

He stressed that if the rate stays low or not products have increased, however, noted the possibility of a decrease in the cost of products.

Before July, the authorities announced in a public forum the new official rate that will apply in the second half of the year.

Notes

The estimated consumption of customers with 400 kWh is 772,317, which are 82% of total customers.

The State contribution to these customers with consumption up to 400 kWh is being calculated based on figures provide timely Ministry of Economy and Finance, as announced Asep.

The actual average price estimate of the rate of the three companies for the second half of 2015 customers with consumption up to 400 kWh will be announced by an information forum before July.

As announced by the Government, there will be a rise in the rate for the second half of the year.